Carphone Warehouse 2014 Annual Report Download - page 71

Carphone Warehouse Group plc
Annual Report 2014 69
FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES continued
u) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY continued
TRADE AND OTHER RECEIVABLES
Provisions for irrecoverable receivables are based on extensive historical evidence and the best available information in relation tospecific
issues, but are unavoidably dependent on future events.
REVENUE RECOGNITION
Commission receivable on sales depends for certain transactions on customer behaviour after the point of sale. Assumptions are therefore
required, particularly in relation to levels of customer default within the contract period, expected levels of customer spend, and customer
behaviour beyond the initial contract period. Such assumptions are based on extensive historical evidence, and provision is made for the risk of
potential changes in customer behaviour, but they are nonetheless inherently uncertain. Changes in estimates recognised as anincrease to
revenue may be made, where for example more reliable information is available, and any such changes are required to be recognised in the
income statement. Changes of estimates during the year ended  March  in relation to commission receivable after the initial contract term
for sales originating in previous years totalled £m (: £m). The total value of ongoing revenues receivable at  March  was £m.
Thevalue of ongoing revenues receivable within CPW Europe at  March  was £m.
CURRENT TAXATION
The complex nature of tax legislation across the tax jurisdictions in which the Group and its joint ventures operate necessitates theuse
ofmany estimates and assumptions, where the outcome may differ from that assumed.
DEFERRED TAXATION
The extent to which tax losses can be utilised depends on the extent to which taxable profits are generated in the relevant jurisdictions
inthe foreseeable future, and on the tax legislation then in force, and as such the value of associated deferred tax assets is uncertain.
PROVISIONS
The Group’s provisions are based on the best information available to management at the balance sheet date. However, thefuture costs
assumed are inevitably only estimates, which may differ from those ultimately incurred.
Provisions relating to the disposal of excess property necessitate assumptions in respect of the period to disposal and exit costs, which
may differ from the ultimate cost of disposal.
v) RECENT ACCOUNTING DEVELOPMENTS
In the current year the Group has applied for the first time certain new standards and interpretations, with only IFRS  and Amendments
to IAS  affecting the Group. The impact of the application of these standards is as follows:
— IFRS  ‘Fair Value Measurement’ – provides guidance for fair value measurements and disclosures about fair value measurements.
IFRS  defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the
principal (or most advantageous) market under current market conditions. Other than the additional disclosures, the application of IFRS 
has not had any material impact on the amounts recognised in the consolidated financial statements.
— IAS  (amended) ‘Presentation of Items of Other Comprehensive Income’ – requires certain groupings of items presented in the
statement of comprehensive income. Items that will be reclassified (or recycled) to profit or loss in the future are presented separately
from items that will never be reclassified.
At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these
financial statements were in issue but not yet effective, and in some cases had not yet been adopted by the EU:
— IAS  (amended) ‘Recoverable Amount Disclosures for Non-Financial Assets’
— IAS  (amended) ‘Novation of Derivatives and Continuation of Hedge Accounting’
— IFRS  ‘Financial Instruments’
— IFRS , IFRS  and IAS  (amended) ‘Investment Entities’
— IFRS  ‘Revenue from Contracts with Customers’
— IFRIC  ‘Levies’
A detailed review of the impact of the adoption of these standards, amendments or interpretations will be performed in due course;
however the directors do not currently expect that they will have a material impact on the financial statements of the Group in future periods.